Egyptian businessman threatens government

A key national business figure, Rami Lakah, who is widely reported to have fled Egypt leaving behind almost LE1.5 billion in outstanding bank loans, has threatened to lay off thousands of workers unle

A key national business figure, Rami Lakah, who is widely reported to have fled the Egypt leaving behind almost LE1.5 billion in outstanding bank loans, has threatened to lay off thousands of workers unless the government agrees to help him solve his financial problems. (US$1=LE3.4)

Al Ahali newspaper reported that Lakah, who is now in Paris, made the threat in a letter to Prime Minister Atef Obeid. "Unless the government finds a quick and immediate solution to the problems facing the Lakah Investment Group, 4,000 workers, including the best of our sons - doctors, engineers and technicians - will lose their jobs," Lakah said in the letter.

The newspaper said Lakah also warned that his companies would quit the bourse in Cairo, Luxembourg and London if the government does not come to his aid. He reminded the Prime Minister that his companies form part of Egypt's financial index.

Lakah said his companies were the only one in Egypt to issue international bonds (Eurobonds) worth $100 million, noting that Lakah Investment Group was last year classified BB+ by leading financial institutions. He said it would now be difficult to convince shareholders that a company with such classification is about to collapse. "This is likely to have a negative impact on the reputation of Egypt's economy," he added.

Lakah's reported flight stunned the business community. He blames heads of banks and senior officials in Cairo of seeking to destroy his economic empire. "I have lost everything; I have lost the capital which I gathered over 15 years," he said. Lakah threatened to take "violent action, if needed," if the government does not help him repay his loans to the banks.

The newspaper said the strongly worded letter, a copy of which was sent to President Hosni Mubarak, had enraged the prime minister and his aides. It described Lakah as a corrupt businessman who had made his way to the top by paying bribes and employing relatives of senior government officials.

On 16 August, Al Ahali published a front-page story saying Lakah had fled to Paris because he couldn't pay back his debts. Subsequent coverage alleged that Lakah had demanded that the Egyptian government cancel half of his total debt and reschedule payment for the other half.

Lakah's debts far surpass those of other businessmen who found themselves in similar situations.

As one of the giants of the Egyptian economy, the Lakah Investment Group has a total capitalization of LE1.149 billion. The group owns ten companies, six of which are in the health services and equipment sector, with other interests in industry and construction. –(Albawaba-MEBG)